Conscious capitalism has gained a global understanding within the past 10 years. The history of the conscious capitalism movement is important. To build a foundation of knowledge on and to know how to leverage the model correctly
It would be difficult to put an exact date on the origins of conscious capitalism because there have always been conscientious businesses working within industries that are generally wracked with unconscious ownership and material gain centered activities. Business has traditionally been focused on one thing: Profit Above All Else. However, many people would attribute the first public comments on the issue in modern times to Muhammad Yunus, 2006 winner of the Nobel Peace Prize, who spoke about inspiring the next generation to change the world. In 2007, Kip Tindell and John Mackey created the Conscious Capitalism Alliance. They then copyrighted the term conscious capitalism.
There are four basic principles to conscious capitalism: purpose, culture, stakeholder, and leadership. The purpose has to be higher than just making money. The purpose must be the main focus of the business, beyond profit. Stakeholders, not shareholders mind you, in consciously capitalist businesses must understand that the business is an ecosystem and that it will not thrive without all aspects of the system being in harmony, which includes all the stakeholders including the employees and the customers. Leadership in a business that practices conscious capitalism understands that their role is to balance the needs of the business, the stakeholders, and acting as part of the team to inspire. Culture is a term that is comprised of the principles and practices of the business as well as their values.
Conscious Capitalism Movement
The conscious capitalism movement is built on the basic tenets of capitalism. Free trade, competition, entrepreneurship and voluntary exchange all being hallmarks. The movement asks business leaders to consider the reasons that they exist. To give acknowledgment to the fact that they play a role in the global marketplace. The movement works to change the basic capitalist business mindset that has formed in the past. Tending to the needs of all parties involved in their business, from employee to consumer. The bottom line is not the bottom line anymore. The idea of not polluting the world is also paramount while the conscious capitalism movement pushes businesses to consider how they sell the products that they sell, whether they are made of recyclable material, where they made and does that mean there are lots of food miles to be able to provide that product at a set price.
The working conditions of the workers who work for the suppliers of the products being sold by businesses are coming to the forefront, with a newfound focus on corporate social responsibility. This makes businesses give back to the local area that they operate in and any other area that they do business in which affects the society of that place. An example: clothing retailers building school in third world countries. These retailers import their products from these locations and have a benefit to the labor that they buy for the minimal price. The wages of these workers are also much in dispute. Businesses trying to meet the conscious capitalist criteria will seek to improve the lives of those who provide the products. These products are the foundation of the business, and the foundation of those products are the people.
Areas of business where the conscious capitalism movement is gaining traction include the travel industry, airlines, and grocers. In travel, there is worry about the impact of the tourist on the lives of the locals and landscape. These destinations rely on tourism but are also where natural disasters are common. Grocers are a constant source of focus. Poor working conditions in certain third world countries that harvest the produce, as well as the carbon footprint of the distance food must travel to be sold. The fair-trade movement is but one of many that are focused on changes in the food industry, to bring a better standard of life to the workers and areas where raw materials are grown and to even the playing field between the company that always profited and the land and people who were negatively affected by that profit.
There is enough financial and social pressure on many industries to move to a more conscious way of doing business. Many have realized that their existence and daily operations have a huge ripple effect on people around the globe. The power to affect greater change is theirs. They are writing the history of conscious capitalism now.